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Op-ed Placement

In Defense of the Flat Tax

The flat tax is getting a lot of attention—and a lot of criticism—as an increasing number of Republican presidential candidates embrace the idea in some form or another. Sen. Rand Paul (R-KY), Donald Trump, Ben Carson, and Sen. Ted Cruz (R-TX) have all proposed their own variations on the idea, with an emphasis on simplicity that seems like common sense to most people.

Right now, the staggering complexity of the 75,000 page tax code is baffling to anyone without years of formal training in tax law, and even the experts are frequently stumped. Every year, Americans spend $37 billion and 3.24 billion hours simply complying with tax laws. Imagine if those resources could be freed up for more productive use!

This is part of the intuitive appeal of a flat tax. Eliminate loopholes and deductions, and charge everybody the same, predictable rate, and what has historically been a months-long nightmare for many taxpayers could become as simple as mailing a postcard.

Another key argument in favor of a flat tax is putting an end to social engineering, and restore the code to its original purpose of collecting revenue. Right now, we have government trying to influence a wide variety of behavior through the wholly inappropriate means of the tax code. Taxes try to “nudge” individuals and businesses alike into doing things the government thinks we ought to do, and deter us from things of which the government disapproves. It was never supposed to be this way. Apart from the ethical issues surrounding official sanction or censure of otherwise legal activities using taxes, the result of this policy has been a hopeless tangle of spaghetti-like exemptions, rebates, and surcharges that is next to impossible to navigate.

Taxes should be used for one thing and one thing only, funding the government, which brings us to one of the most persistent criticisms of the flat tax model: how to pay for it. Using the static model familiar to most tax analysts, the assumption is that if you cut taxes by 10 percent, you will get 10 percent less revenue. Under this type of analysis, a flat tax would result in a huge loss of revenue. In the real world, however, people respond to incentives and alter their behavior based on the taxes they will expect to pay. If a flat tax makes it easier to start a business or invest in new technologies, the revenue loss will be offset, at least partially. Indeed, in many cases tax cuts can actually result in more revenue, an insight most famously demonstrated to by economist Art Laffer.

If there’s one thing Democrats love to talk about, it’s equality. The egalitarian streak runs deep in the party of Hillary Clinton and Bernie Sanders, to the point where a majority of Democratic operatives have cited income inequality as their primary concern in the 2016 elections. But when it comes to the tax code, equal treatment under the law seems to be the furthest thing from the candidates’ minds.

The recent spate of scandals involving the federal government should not surprise anyone. While it's important that bad actors in government be held to account, the system corrupts even the best people. If all that comes of this exposed corruption is the firing of a few public employees, nothing will change, and those seeking power over their fellow man will be emboldened.

On The FreedomCast today, Dean Clancy, VP of Public Policy joins me to discuss The New Fair Deal legislation package, empowering individuals and leveling the playing field between small business and big government. Join us for the New Fair Deal Action Day!

A flat tax rate on all income regardless of source will shift the discussion to spending and end the politics of envyThere is a legend that after being knocked around early in his career, Hall of Famer Bill Russell was advised by storied basketball coach Red Auerbach to throw an elbow in a nationally televised game to send a message to his adversaries.

This past Sunday in the New York Times, Paul Krugman opined about a better time in America when the Twinkie was still revered, when families huddled around their black and white television to watch "The Howdy Doody Show" and the wealthiest among us paid their "fair share" by means of a 91% marginal tax rate. Aw, yes the good ol' days....

FreedomWorks is proud to report that the 2012 GOP Platform, as approved at the 2012 Republican National Convention in Tampa, Florida, incorporates almost all key elements of the FreedomWorks “Freedom Platform”. Most notably, the 2012 GOP Platform calls for both an Audit of the Federal Reserve and the full repeal of Obamacare, two of the cornerstones of the Freedom Platform. Striking similarities between the two platforms are an encouraging reminder of the ground that the freedom movement is gaining within the establishment Republican Party.

Last week Senior Economics Writer for the Wall Street Journal, Stephen Moore published an in depth look at our tax structure, who really pays and how it compares to what the wealthy pay in other countries. There's many conclusions one could come to from that report, but bottom line; something has to change with our tax code.
It's clear that the current system of gimmees, kickbacks, exemptions and tax breaks is anything but simple, flat or fair. Just look at who really pays.....

The current U.S. tax system is huge convoluted mess. The Internal Revenue Service (IRS) has six federal income tax brackets ranging from 10 to 35 percent. Our so-called progressive tax system punishes the most productive members of society with a higher tax rate. The current tax system is riddled with loopholes and biases that hurt individuals who save money for the future. Not only does our tax code treat citizens differently but it is hopelessly complicated.